MORGAN STANLEY TO EXPAND INVESTMENT IN TAIWAN: MINISTER

Morgan Stanley, a global financial services firm headquartered in New York, is considering expanding its investment in Taiwan's technology industry, consumer products sector and government infrastructure projects, according to Minister Without Portfolio Chu Yun-peng.

Morgan Stanley Asia Chairman Stephen Roach expressed confidence in Taiwan's economy Wednesday during a meeting with Vice Premier Chiu Cheng-hsiung and several government officials, Chu related.

Roach said he is optimistic about Taiwan's economic prospects based on its fairly good macroeconomic economic performance in terms of sustainable economic growth rate and price stabilization.

He also cited the new government's economic policies as another reason to be optimistic, saying that it would improve Taiwan's competitiveness, according to Chu.

Roach said Morgan Stanley's investment in Taiwan has reached US$1 billion and will continue to expand, Chu said.

The global financial company's investment is mainly in the banking and financial service sector due primarily to the low price-earnings ratio and low risk in the industry.

According to Chu, Roach praised the government for disclosing details of its investment in the two troubled U.S. mortgage lenders, Fannie Mae and Freddie Mac, earlier in the week, a move Roach said had greatly minimalized the impact of the subprime mortgage meltdown on the country, compared with other Asian nations.

Meanwhile, Roach said Taiwan is a low-risk investment area in terms of housing investment, as real estate prices in the country did not begin to surge until very recently. As a result, the risk of investing in Taiwan's banking sector is also low, he said.

In view of the fact that Taiwan's technology industry has readied itself to make inroads into the global market with its sound fundamentals, Roach said, Morgan Stanley is interested in investing in the sector.

Anticipating a growing demand for consumer goods, Roach said, his company also attached great importance of Taiwan's consumer products industry because the top three largest foodstuff companies in China are all operated by Taiwanese.

The chairman also saw great potential in the government's public construction plans and the mass media industry, Chu noted.

However, Roach indicated that many areas, such as over-competitiveness in the financial industry, the high proportion of state-run enterprises, high tax rate on overseas income and low demand for loans, need to be addressed in the interest of Taiwan's economic development.

In addition to Chu and Chiu, Council for Economic Planning and Development Chairman Chen Tain-jy, Financial Supervisory Commission Vice Chairman Lee Jih-chu, Central Bank Deputy Governor Yang Chin-lung and many others also attended the meeting.

(CNA)

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